Hourbased

Hourbased is a term used to describe pricing, billing, and resource allocation that is determined by the number of hours consumed or worked. While not tied to a single organization or product, hourbased models appear across professional services, software, and operations where time is the primary unit of measurement.

In professional services, hourbased billing, also called time-and-materials, charges clients for the actual hours spent on a project, often with agreed hourly rates and minimums. Software and cloud providers may offer hourbased usage for features, compute time, or data processing, typically via metered plans, API quotas, or per-hour subscription components.

Implementation typically requires reliable timekeeping, transparent rate cards, and contract terms. Invoicing processes convert logged hours into bills, with considerations for overtime, travel time, or non-billable hours. Benefits include flexibility and alignment with actual effort; drawbacks include revenue unpredictability for providers and potential cost exposure for clients, along with administrative overhead to track hours accurately.

Hourbased models contrast with fixed-price or milestone-based approaches. They depend on trust and clear definitions of what constitutes billable time, scope, and acceptance criteria. They are widely used in agile development, consulting, maintenance services, and rental or usage-based IT services.

See also: time-based pricing, hourly rate, time tracking, time and materials.